Frontline (FRO) AI Stock Analysis

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Frontline

(NYSE:FRO)

Rating:73Outperform

Price Target:

$19.50

▲(5.92%Upside)

Frontline's overall stock score is supported by its solid financial performance and promising earnings call highlighting strong cash generation potential. The fair valuation with a healthy dividend yield adds to its attractiveness. However, technical indicators suggest caution due to bearish momentum and oversold conditions.

Frontline (FRO) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$4.07B

Dividend Yield3.94%

Average Volume (3M)2.95M

Price to Earnings (P/E)11.8

Beta (1Y)0.42

Revenue Growth0.88%

EPS Growth-45.41%

CountryUS

Employees85

SectorEnergy

Sector Strength42

IndustryOil & Gas Midstream

Share Statistics

EPS (TTM)0.15

Shares Outstanding222,622,900

10 Day Avg. Volume2,033,306

30 Day Avg. Volume2,945,338

Financial Highlights & Ratios

PEG Ratio-0.41

Price to Book (P/B)1.81

Price to Sales (P/S)0.00

P/FCF Ratio6.16

Enterprise Value/Market Cap1.83

Enterprise Value/Revenue0.94

Enterprise Value/Gross Profit11.10

Enterprise Value/Ebitda1.88

Forecast

1Y Price Target

$19.62

Price Target Upside6.57% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering3

Frontline Business Overview & Revenue Model

Company DescriptionFrontline Ltd. (FRO) is a prominent shipping company headquartered in Bermuda, specializing in the global transportation of crude oil and refined petroleum products. It operates a modern fleet that includes very large crude carriers (VLCCs), Suezmax, and Aframax tankers. With a focus on efficient and safe maritime transport, Frontline serves major oil companies and traders worldwide, ensuring the reliable and timely delivery of energy resources across international waters.

How the Company Makes MoneyFrontline generates revenue primarily through the chartering of its fleet to international oil companies and traders. The company's key revenue streams include time charters, where vessels are hired for a specific period, and spot charters, where ships are leased for single voyages. Frontline's earnings are significantly influenced by global oil demand, shipping rates, and operational efficiency. Additionally, strategic partnerships and alliances with other shipping firms and oil companies can enhance its market position and revenue potential. The company's financial performance is closely linked to fluctuations in oil prices and shipping market dynamics, which can impact freight rates and vessel utilization levels.

Frontline Earnings Call Summary

Earnings Call Date:May 23, 2025

(Q1-2025)

% Change Since: 8.23%|

Next Earnings Date:Aug 29, 2025

Earnings Call Sentiment Neutral

The earnings call presents a balanced view with strong TCE performance and cash generation potential as highlights. However, concerns over decreased adjusted profit, increased operating costs, and global growth prospects present challenges. The market dynamics are influenced by sanctions, providing opportunities for compliant oil demand. Overall, the sentiment is cautiously optimistic with a mix of opportunities and challenges.

Q1-2025 Updates

Positive Updates

Strong TCE Performance

Frontline achieved $37,200 per day on VLCC fleet, $31,200 per day on Suezmax fleet, and $22,300 per day on LR2/Aframax fleet in Q1 2025. An increase in booking rates for Q1 with 68% of VLCC days at $56,400 per day, 69% of Suezmax days at $44,900 per day, and 66% of LR2/Aframax days at $36,100 per day.

Solid Liquidity Position

Frontline reported strong liquidity of $805 million in cash and cash equivalents with no meaningful debt maturities until 2030 and no new building commitments.

Substantial Cash Generation Potential

Frontline has a cash generation potential of $332 million or $1.49 per share, with the potential to increase by 100% with a 30% increase from current spot market rates.

Positive Impact of Sanctions

Sanctions leading to a more compliant market, with India and China shunning OFAC-listed vessels, and the potential for increased compliant oil demand.

Negative Updates

Decrease in Adjusted Profit

Adjusted profit in Q1 decreased by $4.7 million compared to the previous quarter, primarily due to a decrease in time charter earnings.

Concerns Over Global Growth Prospects

U.S. policy changes and global trade negotiations pose concerns for global growth prospects, impacting the energy complex and tanker market.

Operating Cost Increases

Operating costs have increased sequentially and year-over-year on a per vessel basis, with current OpEx expenses reported at $8,300 per day.

Company Guidance

During the Q1 2025 earnings call, Frontline plc provided guidance that highlighted various operational and financial metrics. The company's CEO, Lars Barstad, reported that the VLCC fleet achieved a TCE of $37,200 per day, Suezmax $31,200 per day, and LR2/Aframax $22,300 per day. For the ongoing quarter, 68% of VLCC days were booked at $56,400 per day, 69% of Suezmax at $44,900 per day, and 66% of LR2/Aframax at $36,100 per day. Financially, the company reported a profit of $33.3 million, or $0.15 per share, and an adjusted profit of $40.4 million, or $0.18 per share. Time charter revenues decreased to $241 million from $249 million in the prior quarter. Frontline maintained strong liquidity with $805 million in cash and cash equivalents and reported no meaningful debt maturities until 2030. The fleet, consisting of 41 VLCCs, 22 Suezmax, and 18 LR2 tankers, averaged 6.8 years in age, with 99% being ECO vessels. Additionally, the company projected cash generation potential of $332 million or $1.49 per share, with a 30% increase from current spot market levels potentially doubling this figure.

Frontline Financial Statement Overview

Summary

Frontline demonstrates strong profitability and efficient cash flow management despite a decline in revenue. The company maintains a stable balance sheet with manageable leverage, but the decrease in revenue and return on equity warrants attention. Overall, Frontline is in a solid financial position with opportunities for growth and improved shareholder returns.

Income Statement

Positive

Frontline shows strong profitability with a solid EBIT margin of 32.8% TTM and a reasonable net profit margin of 18.3% TTM. However, revenue has declined by 7.3% in the TTM period compared to the previous year, indicating potential challenges in revenue generation.

Balance Sheet

Positive

The balance sheet reveals a moderate debt-to-equity ratio of 1.58 TTM, indicating leverage is being managed, but still presents some risk. The equity ratio is stable at 37.9%, showing a balanced asset financing structure. However, the return on equity has decreased to 14.9% TTM, suggesting reduced shareholder returns.

Cash Flow

Positive

The cash flow statement is robust, with a significant improvement in free cash flow from negative to $686 million TTM, showing strong cash generation ability. The operating cash flow to net income ratio is healthy at 2.02, indicating efficient cash generation relative to earnings.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.90B	2.05B	1.79B	1.43B	749.38M	1.22B
Gross Profit	671.74M	695.91M	761.43M	481.00M	30.61M	536.70M
EBITDA	842.88M	1.15B	1.06B	725.83M	217.24M	628.35M
Net Income	348.05M	495.58M	656.41M	475.54M	-11.15M	412.88M
Balance Sheet
Total Assets	6.14B	6.22B	5.88B	4.78B	4.12B	3.92B
Cash, Cash Equivalents and Short-Term Investments	438.42M	417.56M	315.75M	490.81M	115.51M	177.36M
Total Debt	3.67B	3.75B	3.46B	2.37B	2.37B	2.20B
Total Liabilities	3.81B	3.88B	3.61B	2.51B	2.46B	2.31B
Stockholders Equity	2.33B	2.34B	2.28B	2.27B	1.65B	1.61B
Cash Flow
Free Cash Flow	686.35M	-178.84M	-775.24M	52.93M	-399.47M	-120.26M
Operating Cash Flow	703.00M	736.41M	856.18M	370.89M	62.93M	604.06M
Investing Cash Flow	241.56M	-483.40M	-1.24B	-239.47M	-363.06M	-715.97M
Financing Cash Flow	-805.37M	-147.80M	433.07M	10.03M	223.55M	124.18M

Frontline Technical Analysis

Technical Analysis Sentiment

Positive

Last Price18.41

Price Trends

50DMA

17.91

Positive

100DMA

16.66

Positive

200DMA

17.12

Positive

Market Momentum

MACD

0.18

Negative

RSI

53.52

Neutral

STOCH

57.46

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FRO, the sentiment is Positive. The current price of 18.41 is above the 20-day moving average (MA) of 17.99, above the 50-day MA of 17.91, and above the 200-day MA of 17.12, indicating a bullish trend. The MACD of 0.18 indicates Negative momentum. The RSI at 53.52 is Neutral, neither overbought nor oversold. The STOCH value of 57.46 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FRO.

Frontline Peers Comparison

Overall Rating

UnderperformOutperform

Sector (52)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
INSW	81 Outperform	$1.89B	6.07	17.57%	6.25%	-18.74%	-39.64%
STNG	79 Outperform	$2.26B	3.21	24.68%	3.74%	-7.25%	31.85%
DHT	77 Outperform	$1.76B	9.92	17.04%	5.48%	-5.32%	5.51%
TEN	77 Outperform	$576.34M	4.33	9.22%	6.27%	-3.67%	-8.90%
TNK	76 Outperform	$1.51B	4.81	18.57%	11.44%	-21.27%	-34.25%
FRO	73 Outperform	$4.07B	11.78	14.79%	3.94%	0.88%	-45.41%
Sector *	52 Neutral	C$2.94B	-1.05	-3.46%	5.87%	3.01%	-47.13%

* Energy Sector Average

Performance Comparison

FRO

Frontline

18.41

-3.85

-17.30%

DHT

DHT Holdings

11.00

0.57

5.47%

STNG

Scorpio Tankers

43.74

-29.16

-40.00%

TNK

Teekay Tankers

44.86

-15.22

-25.33%

TEN

Tsakos Energy Navigation

19.45

-4.98

-20.38%

INSW

International Seaways

39.27

-11.40

-22.50%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jul 05, 2025